Eli Lilly has significantly reduced the price of its blockbuster weight-loss and diabetes medication, Mounjaro, in China, escalating its competitive battle with Novo Nordisk A/S and domestic competitors.

A one-month supply of the lowest Mounjaro dosage is now priced at 599 yuan ($85.79) on JD.com Inc.'s online marketplace, a dramatic reduction of nearly 70% from its initial launch price of 1,758 yuan last year. The highest dose now sells for 1,599 yuan, down sharply from 4,758 yuan. On Alibaba Group Holding Ltd.'s competing platform, final prices are even lower after the application of promotional coupons.

Similar price reductions have been observed in hospital distribution channels. A clinic in the eastern city of Nanjing reportedly cut Mounjaro's price by 80%. It is noteworthy that Mounjaro is approved in China for the treatment of diabetes as well.

This strategic price cut by Lilly mirrors a recent move by Novo Nordisk, which halved the list price of its obesity drug, Wegovy, in several Chinese provinces. The competitive landscape is set to intensify further as Novo's patent on Wegovy's key ingredient, semaglutide, expires in March, clearing the path for numerous Chinese firms to launch cheaper generic versions later this year.

"The market may anticipate more intense price competition going forward," particularly after the semaglutide patent lapses, commented Cui Cui, head of Asia healthcare research at Jefferies LLC.

Lilly did not provide a comment in response to an emailed request.

Both pharmaceutical giants have also implemented voluntary price reductions in the United States, and Novo previously lowered Wegovy's price in India, highlighting the fierce global contest for market leadership in obesity treatments. In China, Lilly and Novo face additional competitive pressure from a domestic brand marketed by Innovent Biologics Inc.

These price cuts coincide with Mounjaro's recent inclusion in China's national drug reimbursement list, meaning the cost is now covered by state insurance for patients using it to treat type 2 diabetes. However, individuals using the drug specifically for weight loss must still bear the full cost out-of-pocket.

"The online price for Mounjaro for the obesity indication remains aligned with its type 2 diabetes pricing," explained Jonah Chen, head of healthcare research at China Merchants Securities HK Co Ltd. "This is a logical strategy to prevent issues related to cross-selling between different distribution channels."